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Argument recap: What causal nexus will the Court require?

Posted Mon, October 17th, 2011 3:16 pm by Richard A. Epstein

What follows are my impressions of the oral argument that took place in Pacific Operators Offshore v. Valladolid, dealing with the proper construction of the Outer Continental Shelf Lands Act. In dealing with this issue, the key words in the statutory scheme that attracted extensive judicial attention are “resulting from any injury occurring as the result of operations conducted on the outer Continental Shelf.” The best way to understand the core of the argument is to note that each side to the argument presented both a strong position and a back-up position. It seems clear that neither of the strong positions will prevail and that the back-up positions were in general quite close to each other in seeking to develop the proper test of causation that links the activities that took place on the continental shelf and the ensuing injuries. The strong position that Paul Clement took for Pacific Operators was that both the operations that generated the injury and the injury itself had to take place on the continental shelf in order for an employee to recover for injury or death. The great advantage to that position is that it gives a clear test as to which injuries are covered and which are not. I confess that I am drawn to it as an administrative matter. But it is not likely that this will prevail, for as Justice Kagan put it, the effort to confine the coverage of the OCSLA to injuries that took place on the continental shelf is to read the causation requirement out of the statute. It is the operations that must be conducted on the shelf. The covered injuries must “result from” those activities, which necessarily requires some causal nexus. Yet at the same time that formulation allows the injury in question to take place somewhere else, so long as the operations in question took place at some covered location. My sense is that all the Justices took this position, and thus were concerned with the explication of the causal requirement as applied in this case.

On the opposite side of the case, the strong position taken by Assistant to the Solicitor General Joseph Palmore, representing the federal government, and David Frederick, for the private plaintiff met, if anything, with even more stony resistance. Their argument in essence was that so long as a covered employee spent the majority of his time on a covered platform, it was totally immaterial where the actual injury in this case took place. In their view, because Valladolid spent about ninety-eight percent of his time on the platform, it was wholly immaterial that he was injured while conducting his work at an onshore oil flocculation facility which handled various elements of crude oil slurry that had originated on the continental shelf. The response to this argument was universal incredulity because it reads out of the statute the requirement that the injury stem from operations that started on the continental shelf. In effect, as Chief Justice Roberts noted, this meant an employee who drove to Reno to get a new part could recover under the OCSLA if he skidded off the road during the trip, so long as he spent most of his time out on the continental shelf.

Not credible, thought the Chief Justice. There is nothing in the statute that turns on the total amount of time, be it large or small, that the employee spent on the continental shelf. Nor did it appear that any of the Justices were willing to buy into the government argument that so long as a worker spends thirty percent of his time on the continental shelf, any accident is covered. Thirty percent of what, asked Justice Kennedy? Is it a career, the last month or the last year? The whole exercise looks like a giant diversion from the statutory language. What matters is whether this particular accident resulted from operations that took place on the shelf, and only the weirdest of “but for” causation tests could link up this injury to operations that took place on the shelf. The case could be covered by the state worker’s compensation statute, but could not be covered in this case.

Matters only went downhill from there. As to heighten the absurdity of this position, a question was asked about a worker who spent only a little time on the shelf but was injured by operations there. Since that person was there for only a small period of time, it appears that any test that focuses on time on the platform as a percentage of total work would necessarily require there be no coverage in this case.

Any decision to deny coverage to those injured from operations while out on the platform is in flat contradiction to statutory language. So long as the injuries occurred on the platform from operations on the platform recovery has to be allowed, even for workers who (like accountants, as was noted) spent most of their time elsewhere. The point was recognized by Frederick in his argument, so that he responded by proposing in essence a two-part test, where the statutory language controlled for those cases of workers who spent little time on the continental shelf but the dominant “locus of work” test applied to those who did not. “Heads I win, tails you lose,” was the tart response of Justice Scalia. His view was that there was no way to torture the language of the statute to reach that result.

At this point, both Palmore and Frederick resorted to their back-up position, which was their alternative version of the proximate causation question that counted as Clement’s back-up position, so in the end both sides are playing in the same sandbox. The question is which of these two views will carry the day. On this matter, the facts actually start to matter, and in my view is that the operations that caused the death of Valladolid were his handling of the oil slurry while on land, not some earlier action by some unnamed person that delivered the slurry to that particular location. Here it is worth noting that the plaintiff is putting forward a very weak version of the “but for” causation test to cover the situation when his own immediate actions, or the immediate conditions at the onshore site, are far better candidates for the pride of place on the causation case. We can even allow for the possibility that certain injuries arise out of joint activities and still take the position that nothing that took place on the continental shelf rises up to causal status.

In dealing with this question, it is instructive to take a moment to mention a hypothetical case mentioned by Frederick in his oral argument. That case involves a worker who is injured in cleaning up an oil spill that originated on the platform. Frederick noted that even the petitioners conceded this case. And so they should under the statutory language, given that the action taken by the workers was necessitated by operations that took place on the platform and thus “resulted” from its operations. The key point here is that we can identify some tortious-like act – the discharge or release – that took place on the platform that resulted in the worker springing to action. There is no analogous tort-like action at play in the instant case. This is not a situation where someone on the platform introduced some dangerous ingredient that made the slurry more dangerous that was ordinarily the case when it reached land. The conditions that created the heightened risk – whatever they may have been – were intimately associated with operations that took place on land. To see why, ask what the result would be if the level of benefits under the California workers’ compensation statute were identical to those under the federal law, so that the only question was which of the two schemes would pay for the benefits. In that case it seems clear that the state scheme bears the closer nexus to the injury by far.

The result is no different when the level of awards differs under the two systems. Congress could expand the coverage afforded under the OCLSA to avoid the gaps. But so long as it has adopted a limited coverage formula, there will of necessity be close cases on the opposite side of the line. This case, however, does not seem to be one of them. If Valladolid had spent ninety-eight percent of his time on shore, he could not recover under the OCLSA because he spent two percent of the time on the rig. The percentages do not matter in any case. What does matter is the causal connection. Modern theories of proximate causation are often more pliable than those which I think appropriate to the overall topic. That laxity in doctrine creates additional changes for the respondents, for it makes it somewhat harder to read all the Justices. Nonetheless, my sense is that on the causation question the clear majority of the Justices will conclude that that substantial nexus test would require some showing of connection more tangible or direct than the one announced here.

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